UMass Memorial launching its own insurance company

Photo | Matthew Wright Dr. Eric Dickson, president and CEO of UMass Memorial Health

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UMass Memorial Health, the largest healthcare provider in Central Massachusetts, on Friday confirmed it is starting its own health insurance division.

The insurance company -- called Central Mass Health LLC -- will be organized under the UMass Memorial Health Ventures umbrella, which is for all the non-hospital aspects of the UMass Memorial system.

"The establishment of Central Mass Health is in keeping with our long-term strategy to become a more integrated healthcare delivery network," UMass spokesman Anthony Berry said. "Over time we have built a lot of assets - including a strong provider arm - but have felt that an important missing piece to achieving total integration was an insurance product."

The announcement on Friday comes after the highly public-facing CEO of UMass Memorial Health, Eric Dickson, joined by Thomas Scully and Jack Shields, incorporated a company on Feb. 11 called Central Mass Health LLC, which will be headquartered in Worcester at a UMass Memorial building known as Biotech One.

The website The016.com first reported the news of the incorporation.

"We believe, in general, payer-provider integration is a much better model that brings great benefits to patients," Berry said. "We will continue to work with other insurance providers."

UMass plans to bring in a strong and accomplished leader to serve as CEO of Central Mass Health, said Berry.

Less than a dozen health insurance companies operate in Massachusetts, which are led by Blue Cross Blue Shield of Massachusetts, Tufts Health, Harvard Pilgrim Health Care, and Fallon Health. At the end of March, Worcester-based Fallon said it was dropping out of the commercial insurance market and focusing on government programs including Medicare and Medicaid.

The UMass Memorial system includes hospitals in Worcester, Marlborough, Leominster, Southbridge, and Clinton, has more than 14,000 employees, and its own doctors group. The system annually contributes $200 million to the state's medical school - UMass Medical School in Worcester

In the UMass Memorial incorporation documents for its new insurance division with the Massachusetts Secretary of State, Dickson and his partners said Central Mass Health will not practice medicine, but will develop and arrange for the provision of health care, primarily through managed care programs, health maintenance organizations, and alternative healthcare delivery programs.

At the same time, an April 28 public notice that ran in the Telegram & Gazette indicates the LLC applied to the Massachusetts Division of Insurance to obtain a Health Maintenance Organization license to transact health insurance in Massachusetts.

The two people other than Dickson listed in the incorporation documents also are high-profile healthcare executives.

Scully is a former administrator for the U.S. Centers for Medicare and Medicaid Services and currently a partner at New York City healthcare law firm Welsh, Carson, Anderson & Stowe.

Shields is the CEO and founder of Shields Health Solutions, which has a variety of offices specializing in various health services around Massachusetts.

The other person listed on the company's incorporation documents is Edward Stubbers, who general counsel and senior vice president of legal at CareSource, which is the largest Medicaid plan in Ohio and the second largest in the U.S.